International Monetary Fund (IMF) Managing Director Kristalina Georgieva has projected that Arab economies will achieve 3.7% growth, reflecting improving economic conditions across the region and a more supportive global environment. The outlook is driven by a combination of factors, including stabilizing oil markets, a recovery in non-oil sectors, stronger remittance flows, and continued fiscal and structural reforms across many Arab countries.
Oil-producing economies are expected to benefit from relatively stable energy markets and improved production dynamics, supporting public revenues and investment. At the same time, diversification efforts are gaining traction, with non-oil sectors such as tourism, logistics, manufacturing, technology, and financial services contributing more significantly to growth. These sectors are helping reduce reliance on hydrocarbons while creating jobs and attracting foreign investment.
Non-oil recovery remains a key pillar of growth, particularly in countries that have accelerated reforms aimed at improving the business environment. Measures such as regulatory simplification, infrastructure development, and support for private-sector participation are enhancing productivity and competitiveness. These reforms are strengthening economic resilience and enabling more balanced, sustainable growth across the region.
Remittances continue to play an important role in supporting household incomes and consumption, especially in labor-exporting countries. Improved employment conditions in host economies, combined with greater formalization of remittance channels, are helping stabilize external balances and support domestic demand.
Fiscal reforms have also been central to the improved outlook. Many Arab governments have focused on strengthening public finances through subsidy rationalization, revenue diversification, and more disciplined spending frameworks. These measures are helping reduce fiscal vulnerabilities, improve debt sustainability, and create space for social and development spending.
At the global level, Georgieva noted signs of improvement in growth and inflation trends. While challenges remain, easing inflationary pressures and more predictable monetary conditions are providing relief to emerging and developing economies. This global stabilization supports trade, investment flows, and financial conditions for Arab economies.
Despite the positive outlook, the IMF emphasized the importance of maintaining reform momentum and addressing structural challenges, including unemployment, productivity gaps, and climate-related risks. Continued investment in human capital, digital transformation, and green growth will be essential to sustaining long-term progress.
Overall, the IMF’s projection highlights growing confidence in Arab economies. With supportive global trends, ongoing reforms, and diversified growth drivers, the region is well positioned to strengthen economic performance and resilience in the coming period.
